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Income Taxes
3 Months Ended
Mar. 31, 2022
Income Tax Disclosure [Abstract]  
Income Tax Disclosure Income Taxes
For the three months ended March 31, 2022, we reported an effective tax rate of 31.8%, which was higher than the 21.0% U.S. federal statutory rate due primarily to nondeductible expenses in connection with certain legal and regulatory matters, state taxes and other rate-impacting items, partially offset by excess tax benefits on stock-based compensation.
For the three months ended March 31, 2021, we reported an effective tax rate of 16.8%, which was lower than the 21.0% U.S. federal statutory rate due primarily to excess tax benefits on stock-based compensation and discrete tax benefit related to electing the Global Intangible Low Tax Income (“GILTI”) high-tax exclusion retroactively for the 2018 tax year, partially offset by state taxes and other rate-impacting items. On July 20, 2020, the U.S. Treasury issued and enacted final regulations related to GILTI that allow certain U.S. taxpayers to elect to exclude foreign income that is subject to a high effective tax rate from their GILTI inclusions. The GILTI high-tax exclusion is an annual election and is retroactively available.
The gross amount of unrecognized tax benefits, which excludes indirect tax effects, was $46.4 million as of March 31, 2022, and $45.8 million as of December 31, 2021. The amounts that would affect the effective tax rate if recognized are $29.5 million and $28.3 million, respectively. We classify interest and penalties as income tax expense in the consolidated statements of income and their associated liabilities as other liabilities in the consolidated balance sheets. Interest and penalties on unrecognized tax benefits were $8.2 million as of March 31, 2022, and $7.6 million as of December 31, 2021. We are regularly audited by federal, state and foreign taxing authorities. Given the uncertainties inherent in the audit process, it is reasonably possible that certain audits could result in a significant increase or decrease in the total amounts of unrecognized tax benefits. An estimate of the range of the increase or decrease in unrecognized tax benefits due to audit results cannot be made at this time. Tax years 2009 and forward remain open for examination in some foreign jurisdictions, 2012 and forward for U.S. federal income tax purposes and 2015 and forward in some state jurisdictions.